I attended a conference recently where one of the speakers said something very provocative, but that I knew was true. In fact, I’ve known it to be true my entire life, but the way they said it hit me like a ton of bricks. It was how planning for the future is like toilet paper. What this person said made all the sense in the world to me.
In this industry, we are inundated with hypotheticals, illustrations, and projections. It doesn’t make any difference what firm an advisor might be working through, there are always calculations that go into their planning for the future. Yes, we do have to take some of these calculations seriously, but when you have been doing this as long as I have (for an entire generation, over 35 years), what this person said gets down to the brass tacks on how reliable much of that information actually is.
This is what they said, “A hypothetical illustration, or a projection, is as good as toilet paper because it’s only good for one use.” What did he mean by that? Well, we know what toilet paper is good for; it’s good for one use. It’s something that you are not going to be using again. The same thing occurs when you create a projection for the future because life is constantly changing. I meet with advisors from all over the country and if they have any gray hair at all, they all know that this is true. We all have knowledge. We all have the same education. We all have the understanding of how markets and investments can work for or against an individual, but knowledge is not enough. Wisdom tells us that nothing ever plays out how we think it’s going to play out. If we look back into our 20s, 30s, 40s, or whenever we started our career up until now, nothing an advisor ever initially created turned how that advisor thought it would. That’s because there have been changes, inflation has changed, the markets have changed, or products that exist today that were not even ideas 30 years prior. I remember what the world was like before email. I remember when the world was centered around faxes. I cannot even tell you the last time I have sent or received a fax. This is how life changes.
If you sit down with an individual and they say that they can plan your life from beginning to end, it simply is not true. Whatever they show you as an illustration, as a hypothetical, as a projection, it will only show you what will happen if nothing ever changes, for the rest of your life. It becomes a snapshot in time. It becomes like toilet paper. It’s good for one-time use. That’s why it’s important to get together regularly with whatever advisor you are working with. There have to be adjustments. There needs to be corrections. Tomorrow is a new day. It will have its own positives; its own problems, but it needs to be recalculated just like a pilot does on a plane the entire time that they are in the sky. They’re making coarse corrections because of wind, the rotation of the earth, or the weather. Life is nothing but coarse corrections.
So, take this to heart today. Don’t trust that what someone guarantees you will end up with at the end of your life will actually happen. We know it won’t. Whatever numbers you are given that day is only good for that day’s one-time use. It's as good as toilet paper. If you would like to have more information on how we do things, which is different than what you will see elsewhere, then today is the day to schedule your Financialoscopy®.
